The Legislature may not be able to agree on much (including their summer break) but it seems they can agree we must do everything possible to encourage California’s housing recovery. That is why during the break Governor Jerry Brown signed a California Building Industry Association-sponsored measure authored by Assemblyman Raul Bocanegra that will fuel California’s housing recovery.
The measure, which received only “yes” votes through every step of the legislative process, builds on previous bills and will allow local governments to extend the life of approximately 3,500 subdivision maps representing 400,000 housing units for 24 months. This ensures projects that create thousands of construction related jobs and billions of dollars in economic output, which goes straight into local and state coffers, will move forward and actually get built.
Put simply, this bill will help housing supply keep pace with demand, preventing another bubble that artificially drives up prices. While the recent uptick in most markets is encouraging, it’s critical builders keep pace with supply in order to avoid prices that are artificially high. California needs a strong recovery that’s sustainable and leads to robust growth in every sector.
What’s more, the 3,500 tentative tract and parcel maps extended by this bill are the housing supply pipeline that will drive the recovery. Without these hard-earned land use entitlements, builders would have to spend years redoing the process that would certainly delay much-needed projects. Housing and construction jobs are the foundation for our economic upturn.
As every homeowner and renter has learned the hard way, it’s been a rocky few years for our state’s economy and for the housing market. Employment in the building sector plummeted from around 800,000 construction-related jobs to 80,000. But the tide has turned and the housing sector is now leading California’s recovery. Once we get rolling again, it generates $328 billion in direct and related economic activity and 10% of the state’s economic output. Even in 2012, new housing construction supported 154,000 jobs.
By 2014 the California Homebuilding Foundation estimates housing starts of 75,000 units in 2014 and 100,000 units in 2015. This is the equivalent of 400,000 jobs and $67.2 billion in output. That is why it is so critical the legislature doesn’t create unnecessary regulatory burdens or duplicative procedures that will stop these projects from moving forward.
While the signs of recovery are encouraging, we aren’t yet out of the woods. There are a number of bills that threaten our recovery making their way through the legislative process. We’re grateful the legislature saved these maps and look forward to working with them in these final months of the legislative session as we work through other issues that will move the recovery forward.